You can see it just about everywhere you look. From consultants, experts, financial forecasters and entrepreneurs, they’re all very bullish. 2016 is projected to be marijuana’s best year yet. Fortune Magazine says over $6.7 billion in revenue is projected this year alone. Major investment groups like Sequoia International are earnestly seeking to transform the industry. Those pesky and previously impenetrable laws criminalizing marijuana are suddenly dropping like dominoes, as legalization (especially for medicinal purposes) has exploded. In mid-April, Pennsylvania became the 24th state to pass legislation to legalize medical marijuana. Including Washington D.C., nearly half the country is making cannabis a legal entity.
What does that mean for you? If you’re an ambitious entrepreneur, it means incredible opportunity for you to open and operate your very own medical marijuana dispensary. The promise is obviously very appealing. With so much legal momentum coming to the United States, federal legalization to some is simply inevitable. Get in early, you stand to make a fortune! Thousands of observers are realizing that this isn’t just a “side hustle,” this is a major opportunity to grow a legacy and build a lifetime fortune in.
So why is there so much hesitancy from millions who want to jump into the cannabis goldmine? With so much opportunity, you’d think everyone would be jumping to make a move in the marijuana market, but others have been scared off by the freighting forecasts of how horribly challenging it is to get started in the business.
The (Seemingly Insurmountable) Obstacles to Getting Started
- State Regulations: Just because states are legalizing cannabis for medicinal purposes, doesn’t mean that you can just grow and sell at will. There are many regulations to consider, and each state has a different set of interesting hoops for you to jump through. For example, California laws state that you must operate your medical marijuana dispensary as a non-profit entity, which makes it very challenging to measure an operation’s success rate.
- Property Ownership: It’s also a huge risk to own any of the properties as marijuana companies are still viewed as federally illegal. That means that property can be seized at any time. It’s no wonder that in places like California, medical marijuana dispensaries are being charged twice and sometimes triple the rent value as landlords seek to take advantage.
- Protecting Profits: Finally, the restriction on holding bank accounts grows the need for security and safe housing to hold large amounts of cash. With so many daunting obstacles; tax forms, government regulations, the cost of renting a space and the challenge to even advertising can make owning a dispensary seem like a nearly impossible task, especially if you don’t have a lot of money. Ultimately, there is a mindset that unless you have big dollars – upwards of half a million – you’re better off staying away from the dangerous risk of losing money in the unpredictable marijuana business.
Or maybe, all this projecting is not nearly as bad as it seems. Despite the obstacles, there are several brave entrepreneurs forging forward and building dispensary empires. Some highly successful dispensary owners are spilling the secrets on blogs and websites alike, with some stating that it is far easier to own a dispensary than what was previously assumed.
From the Dispensary Experts blog:
“Got Start Up Money Problems? Actually, they are in your imagination. Forget what you’ve read… know the truth and so you can see it for yourself… it doesn’t take what you think it does and it doesn’t cost anywhere near what you might be thinking…”
These cannabis business wizards go on to say that they were initially worried that it might take upwards of $500,000 to start up a marijuana dispensary. The reality was all it took was around $7,500 to start up their very first profitable dispensary. The formula appears to have worked very well, as they now report earning 17 medical marijuana dispensaries around the country.
In studying and connecting with successful dispensary owners across the country, it’s easy to conclude that there are four must-haves when owning a marijuana dispensary:
- Don’t be afraid to bootstrap – One of the biggest obstacles many cannabis entrepreneurs have when launching their start-up is projecting that you need a crazy amount of money to get in the game. Truthfully, it is much less than what you think! Find ways to minimize your costs and be very intentional about networking to find a group of serious investors that can begin to get you the necessary money to get in the door. Does your dispensary truly have to look like a version of the Apple Store? If getting the product to your customer base is truly the objective, it won’t take as much money as you need. If you’re interested in getting started, consider getting some small-time quasi investors.
- Don’t overcomplicate it – Again, you don’t need to roll out the red carpet. When you’re just getting started, focus on what is necessary to get your doors open. At the end of the day, cannabis customers simply want to get a very good product from a clean store. There is no need for your dispensary to look like a version of the Ritz Carlton. Focus on your operating budget and treat your business like a business, maximizing profit and minimizing unnecessary costs like bouncers and premium locations. If your product is great, people will come.
- Be tenacious – You’ll need to truly love what you do, and have a fighter’s spirit if you’re coming into this business. You’ll certainly need an ability to connect with your consumer, making them feel welcome and heard. This will certainly be a great tactic to compete against other facilities. Making sure you can outlast the regulations, rules and hardships associated with running a business while selling a product that is not federally legal will be quite a challenge. It will have its complications and you will need to be mentally tough in order to deal with it. Those who stay in it for the long haul can certainly profit an immense fortune in the future.
- Pay attention to detail – Make it a habit to stay in the know about everything associated with your dispensary business. Keep up with the state laws, make sure all of your paper work is in order, your taxes are appropriately paid and continue to keep a network with some very dedicated experts and trailblazers in the field. Your hard work is guaranteed to be very rewarded.
While there are those who say starting a dispensary is next to impossible, there are others who insist it’s not as hard as you think. The reality is somewhere in the middle; a challenge in certain areas, easier than you think but with more complications you were aware of. However, regardless of the challenge, almost everyone can agree. The rewards are very, very high.